Seattle insurance marketer to pay $100M over deceptive sales claims

A Seattle-based insurance marketing company agreed to pay $100 million to settle charges that it engaged in deceptive tactics to sell health care plans, the Federal Trade Commission said on Thursday.

Insurance marketing companies are not insurers, but entities that sell insurance.

Founded in 2016, Assurance IQ billed itself as a direct-to-consumer website that enabled people to buy insurance online. The company also sold insurance over the phone through telemarketing.

The settlement is focused on Assurance IQ's marketing of health insurance products, particularly short-term medical and limited benefits indemnity plans. These are health plans that people buy for brief periods or to supplement their primary insurance. Critically, the plans do not provide comprehensive health coverage and are not compliant with the Affordable Care Act.

Still, Assurance IQ presented its short-term and limited benefit plans as comprehensive, the FTC alleged in a federal district court filing on Wednesday.

The company was also accused of misrepresenting plan benefits and selling customers supplemental products without their consent.

The Defendant has deceived consumers out of hundreds of millions of dollars through the deceptive sales of these health care plans," the FTC wrote in the complaint.

As part of the settlement, Assurance IQ neither admits or denies the FTC allegations.

The settlement represents a precipitous downfall for the Seattle company. Just three years after its founding, the startup was acquired by financial services giant Prudential for a whopping $2.35 billion. In a news release published at the time, Prudential boasted Assurance IQ's data-driven approach and potential to "transform" how consumers shopped for insurance.

At the time, Assurance IQ was part of a wave of companies in the budding "insurance tech" sector that promised to make the insurance industry more efficient, less expensive and personalized thanks to machine learning.

"None of the allegations are against Prudential, but rather involve the historical operations of an acquired business that is no longer operational," read a company statement.

"Resolving this matter for that former business is in the best interest of all parties involved to focus on the future.”

Prudential announced that it would shutter the company in May 2024, just five years after the acquisition.

According to the FTC's complaint, Assurance IQ's telemarketers allegedly misled customers about in-network provider discounts without mentioning important restrictions, and touted out-of-pocket maximums that were "illusory." This left Assurance IQ's customers financially stranded when they actually tried to use their health plans to cover medical expenses, according to the FTC.

"Some consumers did not realize how little coverage and benefits these plans provide until after incurring substantial medical expenses they thought would be covered," the complaint reads. The FTC said that Assurance IQ sold "hundreds of thousands of such plans to customers since 2017.

The FTC alleged that Assurance IQ's conduct violated federal laws prohibiting unfair or deceptive acts or practices or affecting commerce and deceptive and abusive telemarketing acts and practices.

The FTC declined to say when the investigation began. However, Prudential disclosed that it had received a government subpoena over Assurance IQ's marketing practices in 2022, according to a Wall Street Journal article published that year.

The FTC will use the settlement money to provide refunds to people affected by Assurance IQ's practices, wrote Jennifer Tourjé, acting director of the FTC in the Northwest region, in an email.

Consumers can visit FTC.gov/redress to learn about the process for obtaining a refund.

© 2025 The Seattle Times. Visit www.seattletimes.com. Distributed by Tribune Content Agency, LLC.